Market/Finance News Blog: International trade and Australia's economy

By the resi financial blog team, 18 November 2014

There is always speculation around the economical ties around the world, and which trade agreements are most beneficial, especially since countries have started measuring their growth in terms of post Global Financial Crisis recovery. When considering business conditions around the world, Australia is fairing well as her trade partners stabilise.

During a recent address to the Australian Business Economists, Assistant Governor of the Reserve Bank of Australia (RBA), Christopher Kent noted Australia's quickly-expanding neighbours, especially those in the Asian arena, are helping the country to maintain an even keel as other developed nations in the West struggle to find their balance.

"In terms of Australia's real economy - by which I mean the production, trade and consumption of goods and services - what matters on the global front is the strength of our major trading partners," said Mr Kent.

The Assistant Governor went on to say that, "activity rebounded in 2010, following the worst of the global financial crisis. Since then, overall growth of Australia's major trading partners has actually been relatively stable at close to its long-term average. In large part, this reflects the sizeable and increasing share of Australia's exports going to our fast-growing neighbours in the Asian region, most notably China."

His speech went on to detail that although Australia's traditional trading partners in the G7 have accounted for a declining proportion of trade for the nation, their influence on international trade agreements and financial conditions still made them important factors in Australia's fiscal well-being.

An overall sentiment was that the United States, Japan and the euro zone countries should continue in their accommodative monetary policy environments to encourage continued growth and stabilisation, similar to the tactic declared by RBA Governor Glenn Stevens in his November statement on the monetary policy decision.